What Are Types of Agreement That Exist in Business?
What are the various types of agreement? There are several types of agreements in the dealings of corporate business.3 min read
What are the various types of agreement? There are several types of agreements in the dealings of corporate business. Companies generally compose a contract to validate an agreement and the conditions pertaining to the agreement between all parties involved in which the rights of the parties become acknowledged and the expectations of each party involved become known. These contract agreements gain support with the reciprocation of something of value such as money or capital, goods, services, or a pledge to complete certain actions or to refrain from performing certain actions.
All valid and legally enforceable contracts need to include specific elements such as an offer, consideration, and acceptance. There are many different types of contracts that address assorted business circumstances. It's important to know what the different contracts entail to avoid costly mistakes
Types of Contract Agreements
There are different categories of business contracts based on type, distinguished from each other by one or more distinctive elements. Among these distinctions are whether the contract agreement is capable of being enforced, if validity requires documentation in written form or is enforceable orally, and if, under specific conditions, a court of law would acknowledge it as valid.
- Express Contract—A contract where the terms of all the parties involved have been explicitly specified. This contract is also known as a special contract. In this contract, all aspects need to be clearly stated. The agreement pertaining to all parties involved has conveyance in words, either in spoken or written form.
- Implied Contract—An implied contract is an agreement made based on the actions of the parties involved, so it is not a written or spoken contract. It is a legal equivalent of an agreement that could have been composed, so there is no documentation or spoken agreement because it's implied.
- Executory Contract—A contract drawn up by two or more parties in which the terms of completion are set for fulfillment at a later date. The contract specifies that the parties involved still have obligations to fulfill in order for the contract to be completely executed at a later time.
- Bilateral Contract—A contract that is a mutual agreement between the involved parties by which each party promises to execute an action in exchange for the other party's action.
- Unilateral Contract—A contract when one party makes an asserted promise or agrees to a performance without first obtaining an exchanged agreement from the other party.
- Unconscionable Contract—A contract that is so uneven, favoring one side, that it is unfair to one party and, therefore, unenforceable under law. This type of contract doesn't give one party a productive, beneficial choice mainly because of significant differences in bargaining power between the parties.
- Adhesion Contract—A type of contract that is legally binding between two or more parties to execute a specific thing, where one party has all the bargaining power and leverage, using it to create the contract to benefit them.
- Aleatory Contract—For this kind of contract, the parties involved do not have to perform a particular action until a specific event occurs. These kinds of events are uncontrollable, and they are not influenced by any of the parties involved. These events include death and natural disasters.
- Voidable Contract—This contract is not enforceable because it doesn't allocate rights to any of the parties associated with the contract, and it doesn't impose responsibilities or obligations. It is an enforceable contract when a court of law regards it as one that does not tie a party to its terms after another party experiences fraud in the enactment of the contract.
For Further Questions About Types of Agreement
Having knowledge about the different types of agreement is essential while conducting business and knowing the diversities between the individual types of contract agreements will assist you in what you want to attain on a corporate level. UpCounsel.com will help you acquire the understanding concerning business agreements so you can prevent making mistakes in the execution of contracts.
If you want to learn more about the diverse types of agreements that can benefit your business or you have any legal questions concerning how different types of contracts can impact your business, post your legal need on UpCounsel's marketplace.
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